Theranos Set to Dissolve As Company Defaults On Fortress Loan

Eloise Marshall

Theranos, founded in 2003 by a then 19-year-old, wide-eyed Elizabeth Holmes, the Stanford drop-out who everyone believed could change the world.

Holmes had claimed that the company's technology could run comprehensive lab tests using just a few drops of blood - a pitch that appealed to Walgreens, which partnered with Theranos to offer the blood tests in its stores. The Journal reports that most of the company's remaining employees worked their last day on August 31, while Taylor and a few others have just a few more days on the payroll.

The announcement comes almost three months after Theranos founder and former CEO Elizabeth Holmes and former Chief Operating Officer Ramesh Balwani were charged with criminal fraud.

The Securities and Exchange Commission brought civil fraud charges against Holmes and Balwani in March. This arrangement would allow for all of Theranos' assets, other than its intellectual property, to be assigned to a third party in trust for the company's creditors.

It says most of the company's remaining two dozen employees finished work last Friday and that Fortress, the USA private equity firm, is set to take control of the company's patents - leaving just $5m to be distributed among unsecured creditors.

Ms Holmes raised over $700m in funding for Theranos, but when she tried to pitch the technology to the US Department of Defense in 2012, her pitch was rejected due to the devices' unpredictable results.

The regulator alleged that Theranos, Ms Holmes and Mr Balwani made a series of false and misleading statements in investor presentations, product demonstrations and interviews.

The company attracted the attention of USA regulators, including the Centers for Medicare and Medicaid Services, which in April previous year took away the company's clinical laboratory testing certificate.

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